The ex-City boss has seen the Blues enjoy a fantastic start to life under his successor, Sven, and although many have put that down to Sven's summer spending, Pearce feels the City kids are equally responsible for the side's recent success.
"People are talking about Micah Richards, people are talking about Michael Johnson and people are talking about Kasper Schmeichel," he said. "They've all come through the Academy system, but they've been supplemented by good signings - that's the key.
"I know the feeling of warmth every time you put an Academy player on at Manchester City was immense.
"It's a great football club with fantastic people and the fans deserve any success that comes their way.
"A lot of people might say 'you're just saying that', but it's not the case. The club were fantastic to me, I had 6 great years there, but I'm really enjoying what I'm doing."